The  Railways  and 
Prosperity 


ADDRESS   BY 
WARREN  G.  HARDING 

At  the  Annual  Dinner  of  the 
Railway  Business  Association 


December  10,  1914 


1^1 


^t 


The  Railways  and  ProsDcrity 

Address  by 

Warren  G.  Harding 
United  States  Senator-elect  from  Ohio 

Delivered  at  the  Sixth  Annual  Dinner  of  the  Railway  Business 
Association,  the  national  association  of  manufacturers  of 
railway  materials,  equipment  and  supplies,  at  the  Waldorf- 
Astoria  Hotel,  New  York,  December  10,  1914 


MY  only  participation  in  railroad- 
ing was  when,  at  that  early 
age  when  nearly  every  nor- 
mal boy  manifests  some  of  the  at- 
tributes of  a  barbarian,  I  used  to  join 
a  gang  of  youngsters  at  the  village  of 
Caledonia,  mount  a  west-bound  train 
of  flat  cars  while  the  engine  was  tak- 
ing on  water,  ride  two  miles  west  of 
town  for  the  joy  of  a  stolen  ride,  then 
ten  of  us  would  set  brakes  simultane- 
ously and  slow  down  the  train,  dis- 
mount and  escape  before  the  "cuss- 
ing" engineer  had  determined  what 
was  the  matter.  It  was  great  sport 
for  a  few  days,  and  I  thus  early  de- 
veloped a  qualification  in  boyhood  for 
the  making  of  a  politician  with  a  per- 
fectly natural  bent  to  hamper  and 
harass  railway  operation.  There  is  an 
abiding  conviction  of  thirty  years' 
standing,  however,  that  I  would  not 
have  the  pleasure  of  addressing  you  to- 
night had  not  the  trainman,  who 
picked  me  for  an  example,  stumbled 


3 


in  his  pursuit  ot  me  on  the  last  night 
that  our  gang  indulged  its  joy-riding 
propensity. 

EARLY  RAILWAY  PROMOTION 

As  a  newspaper  publisher,  I  can 
boast  some  knowledge  of  railway  pro- 
motion and  construction,  a  sort  of  a 
recording  knowledge  of  the  good  old 
days  in  Ohio  when  the  acquirement  of 
a  railroad  marked  an  epoch  to  the  am- 
bitious community,  and  was  heralded 
as  a  great  and  glorious  accomplish- 
ment, as,  in  truth,  it  was.  The  news- 
paper workers  were  a  part  of  the  sys- 
tem of  promotion,  fostering  friendly 
public  sentiment,  and  shaming  the 
tightwads  who  did  not  shell  out  in 
their  donations  in  accordance  with 
their  proclamations  of  local  pride. 

I  can  recall  that  our  office,  approxi- 
mately thirty  years  ago,  was  a  sort  of 
civic  center,  when  Colonel  Albert  E. 
Boone,  a  typical  promoter,  as  strong 

3j 


in  the  faith  as  he  was  short  In  •finan- 
cial resources,  came  into  our  commu- 
nity, proclaiming  the  great  Black  Dia- 
mond railway,  to  hook  up  with  the 
then  Chicago  &  Atlantic,  now  the  Chi- 
cago &  Erie,  and  thus  put  the  coal 
fields  of  southeastern  Ohio  and  West 
X^irginia  on  a  new  route  with  the 
Westward  Star  of  Empire.  The 
colonel  or  the  Blackie  Daw  in  his  com- 
bination furnished  us  with  the  ammu- 
nition and  our  office  did  the  firing,  and 
the  people  of  my  town  subscribed  a 
hundred  thousand  dollars  to  be  paid 
on  the  arrival  of  the  first  train  over 
the  Zanesville  and  Marion  division. 
That  train  has  not  come  in  yet. 
Our  people  believed  in  the  enter- 
prise and  rejoiced  over  the  proposed 
new  highway  of  trade,  but  were  so 
practical  in  their  endeavors  that  in 
putting  that  subscription  in  escrow 
they  put  the  promotion  on  a  staUing 
grade.  But  we  had  given  new  proof 
of  popular  readiness  to  contribute  to 
railway  development,  changing  only 
the  plan  of  remitting  in  advance  by 
bargaining  for  payment  C.  O.  D. 

That  was  probably  one  of  the  last 
endeavors  in  Ohio  in  steam  railway 
promotion  by  popular  subscription,  but 
the  adoption  of  the  scheme  in  electric 
line  promotion  is  still  much  in  vogue, 
though  there  is  perceptible  diminution 
in  the  practice,  temporarily,  until  the 
public  policy  in  dealing  with  public 
utilities  points  a  safe  way  for  invest- 
ment in  transportation. 

CONSTRUCTION  DAYS 

I  have  cited  this  earlier  experience 
to  recall  the  intense  public  interest  of 
former  days  in  railway  development, 


because  my  home  city  was  like  a  thou- 
sand others.  It  was  the  natural  atti- 
tude of  the  public,  not  only  to  rejoice 
in  railway  development,  but  willingly 
contribute  generously  thereto.  Why, 
my  own  city  contributed  with  an  open 
hand  toward  the  construction  of  the 
Chicago  and  Atlantic;  it  subscribed 
liberally,  and  with  profit,  to  the  build- 
ing of  the  Hocking  Valley,  and  gave 
beyond  present  day  realization  toward 
the  building  of  the  old  Bee  line,  the 
first  of  railway  lines  to  put  us  on  a 
highway  of  commerce.  That  was  in 
the  constructive  days.  That  was  when 
railways  generally  were  looked  upon 
as  an  agency  of  public  good  and  the 
people  were  assisting  them  in  behalf 
of  the  common  weal.  That  was  be- 
fore the  politicians  began  the  profes- 
sion of  hammering  them  for  political 
gain.  That  was  when  we  were  seek- 
ing, and  before  we  developed  the 
American  inclination  to  be  of  scant  ap- 
preciation. That  was  prior  to  our 
present  day  conviction  that  lack  of 
realization  and  appreciation  is  the 
greatest  weakness  of  a  people  popu- 
larly governed. 

ENTHUSIASM  EBBED 

Perhaps  our  "hot  or  cold"  afifections 
for  our  transportation  lines  are  due  to 
inherent  traits  in  human  nature.  We 
are  seemingly  eager  to  seek  that  which 
we  have  not  and  find  excessive  fault 
with  that  which  we  possess.  The  en- 
thusiasm over  our  railway  acquirement 
ebbed  when  transportation  gave  us  an 
era  of  development  unmatched  in  all 
the  progress  of  mankind.  Older  civ- 
ilizations builded  railways  after  our 
fashioning,  but  they  had  less  areas  and 


less  natural  resources,  and  more  ac- 
cessible water  routes — long  estab- 
lished, and  a  less  primitive  stage-setting 
for  the  marvel  of  transformation. 
Thus  it  was  that  the  magic  of  trans- 
portation wrought  the  astonishing 
American  development.  No  sooner 
was  the  triumph  recorded  than  senti- 
ment veered,  and  hostility  to  railroads 
became  a  gospel  of  wide  popularity. 


RAILWAYS  LINKED  WITH 
PROSPERITY 

But  popular  sentiment  eventually 
gets  right,  and  I  can  say  to-night  that 
the  intelligent  public  thought  of  this 
land  of  ours  is  demanding  just  treat- 
ment of  the  American  railroads. 

Amid  all  the  clamor  and  appeal,  two 
thoughts  are  indisputably  established 
— the  efificienQy  of  American  railways 
is  absolutely  essential  to  American 
agricultural,  mining  and  manufactur- 
ing industries,  which  are  the  compon- 
ent parts  of  our  boasted  commerce, 
and  the  good  fortunes  of  the  Ameri- 
can railways  and  the  American  people 
are  indissolubly  linked  together.  The 
present  distress  of  our  industrial  and 
commercial  interests,  happily  showing 
some  signs  of  relief,  has  its  reflex  in 
the  distress  of  our  railroads,  or  if  you 
prefer  it  differently  expressed,  the  dis- 
tress of  our  American  railroads  is 
very  evident  in  the  halted  condition  of 
business  throughout  the  land.  This  is 
not  to  say  that  the  ebb-tide  of  Ameri- 
can good  fortune  is  wholly  due  to  the 
distressed  conditions  of  our  railroads, 
but  the  fortunes  of  the  transportation 
lines  and  our  people  are  so  indissolubly 
linked  together  that  the  one  can  not  be 


injuriously  affected  without  finding  its 
reflex  in  the  other. 

FOR   FAIRNESS  AND  JUSTICE 

The  argument  never  has  strongly 
appealed  to  me  that  we  ought  to  pros- 
per our  railroads  for  the  specific  pur- 
pose of  promoting  general  prosperity. 
It  seems  to  me  more  important  to  pros- 
per our  transportation  lines  as  a  sim- 
ple matter  of  fairness  and  justice  to 
this  important  single  agency  in  our 
modern  lives.  The  popular  mind  has 
been  slow  to  grasp  the  surpassing  im- 
portance of  railway  transportation. 

Ten  thousand  captains  of  industry, 
notably  in  the  interior,  have  realized 
that  railway  facilities  made  their  en- 
terprises possible  and  profitable,  but 
the  toiler  in  the  ranks  has  taken  it  all 
as  a  matter  of  course.  The  interior 
farmer,  far  from  water  routes,  has 
seen  the  market  brought  to  his  door 
almost,  and  has  been  a  beneficiary  of 
the  elevation  of  farming  from  a  mere 
struggle  for  subsistence  to  a  conquest 
for  accomplishment,  but  has  been  un- 
mindful of  the  contributing  agency 
which  did  so  much  to  open  the  way. 


DEPENDENCE  OF  AGRICUL- 
TURE 

It  was  my  fortune  to  spend  several 
weeks  in  Kansas,  a  few  years  ago, 
when  that  turbulent  garden  spot  was 
seething  with  the  unrest  of  good  for- 
tune. Nearly  every  agriculturist  and 
many  a  villager  had  a  "knock"  for  the 
Santa  Fe  system,  but  it  was  my  dis- 
interested and  unprejudiced  conviction 
that  the  ramifying  lines  of  the  Santa 
Fe  railroad  had  as  much  to  do  with 


making  Kansas  a  garden  of  growing 
wealth  as  did  the  fortunate  farmers 
who  made  the  soil  yield  its  mighty 
harvests  of  corn,  wheat  and  alfalfa. 
Nature  had  bestowed  its  bounty,  and 
the  Kansas  farmers  were  effective  toil- 
ers as  well  as  politicians,  but  the  steel 
rail  was  the  reqiiisite  to  the  profitable 
market. 

TRANSFORMATION  OF 
FLORIDA 

I  have  witnessed  a  still  more  mar- 
velous transformation,  beneath  the 
magic  wand  of  the  steel  rail,  directed 
by  a  master  hand.  Less  than  twenty- 
five  years  ago  I  began  visiting  Florida, 
when  that  land  of  sunshine  was  still  a 
wilderness  for  the  most  part,  when  its 
hammocks  and  swamps  were  as  wild 
and  primitive  as  the  wandering  Indians 
knew  them,  with  romantic  borders 
here  and  there,  following  the  lines  of 
primitive  transportation  by  water. 
Birds  of  the  air,  fowls  of  the  sea  and 
beasts  of  the  forest  reveled  in  such  a 
fairyland  that  man  had  reason  to  envy 
them,  but  civilization  left  endless 
stretches  almost  untouched,  except 
where  here  and  there  some  man  with 
a  love  of  wilderness,  in  a  genial  clime, 
pitched  a  rude  habitation.  Down  the 
lagoons  of  the  East  coast  were  gar- 
dens needing  only  human  eft'ort  to 
make  them  blossom  and  bear  in  boun- 
teous willingness,  and  there  were 
acres  eager  to  scatter  the  redolence  of 
fruitful  groves,  with  stretches  of  para- 
dise for  the  traveler  seeking  recrea- 
tion. 

Nature  had  done  its  part,  and  man 
was  awakening  to  appreciation  when 
the  late  Henry  j\I.  Flagler,  attracted  to 


the  playground  at  St.  Augustine, 
caught  the  possibilities  with  his  dis- 
cerning eye,  and  began  with  railway 
construction  the  development  of  the 
East  coast,  while  Henry  B.  Plant  took 
up  the  development  of  the  gulf  coast. 
Transportation  wrought  the  miracle 
of  transformation.  The  playground 
was  extended,  but  the  surpassing  ac- 
complishment was  the  planting  of 
farm,  garden  and  grove,  the  harvest 
of  which  all  of  this  great  people,  east 
of  the  Rockies,  is  consuming,  and 
Florida  sunshine  is  turned  to  profitable 
production  and  wider  enjoyment. 
Meanwhile  we  extended  the  areas  of 
our  real  civilization,  and  turned  to  new 
usefulness  the  bounties  of  creation. 

The  glory  and  honor  are  largely 
Henry  M.  Flagler's,  who  gave  the 
transforming  touch  of  railway  trans- 
portation. His  work  gave  real  value 
to  areas  of  sand  so  seemingly  worth- 
less prior  to  his  pioneering  that  one 
would  not  accept  it  as  a  gift  and  pay 
for  recording  the  deed.  To-day  the 
same  acres  rate  in  values  far  into  the 
thousands.  Mr.  Flagler  did  not  do  it 
all.  for  the  toil  of  man  was  required 
to  develop,  but  he  brought  the  market 
over  ties  and  rails,  and  gave  the  in- 
centive and  promise  of  reward. 


REASONS    FOR    RESENTMENT 

I  can  recall  full  well  how  the  rail- 
way extensions  were  heralded  with 
glad  acclaim,  and  I  have  heard,  since 
tlien,  the  inevitable  reverse  which 
comes  in  the  loud  complain  of  those 
who  quickly  forget  the  agency  which 
made  possible  the  astonishing  shift 
from   wilderness  to  the  glorious  gar- 


den,    where    sunshine    is    shaped    intd 
I)rofitable  products  of  commerce. 

This  reversal  of  popular  sentiment 
toward  railroads  in  general  is  not 
wholh'  without  reason.  There  had 
been  profligacy  of  management,  ex- 
cessive profits  in  promotion,  piracy  in 
financing,  along  with  unrighteous  dis- 
crimination and  contempt  for  popular 
opinion,  more  or  less  heralded  in  the 
])ress.  These  were  s'eized  upon  by 
politicians,  more  eager  to  profit  in  the 
proclamation  thereof  than  to  correct 
the  abuse,  until  there  was  good  rea- 
son for  popular  suspicion  and  unrest. 
Hateful  as  these  things  are  in  public 
estimate,  there  was  some  extenuation. 
Many  a  railway  was  constructed  for 
the  profit  in  promotion,  else  it  had 
never  been  projected.  In  this  fact  lies 
the  explanation  of  much  of  our  devel- 
opment. Builders  were  not  content 
to  wait  for  the  profits  of  carrying,  be- 
cause the  awakened  production  and 
carrying  thereof  had  to  come  of  too 
slow  a  process. 

It  is  fair  to  sa}',  however,  that  in 
most  cases  the  fictitious  values  have 
t)ecome  very  real  in  the  processes  of 
attending  growth.  The  piracy  of  high 
financing — watered  stock  and  exces- 
si\e  bonding — is  not  to  be  so  readily 
excused,  and  is,  in  fact,  mainly  re- 
>ponsible  for  the  hostile  frame  of  the 
public  mind.  ]\luch  of  the  predatory 
plundering  attended  the  evolution  of 
lines  into  systems,  an  accomplishment 
which  none  of  us  would  undo,  because 
the  advent  of  systems  marked'a  higher 
stage  of  capacity  for  public  service, 
and  our  people  must  not  let  their 
righteous  hostility  to  this  plundering 
blind  them  to  the  progress  made. 
Hateful  as  it  was,  it  nevertheless  was 


a  practice  of  the  period,  partly  to  de- 
serve our  tolerance,  because  of  im- 
proved capacity  for  service. 

One  thing  is  certain,  though  our 
people  cry  out  against  the  great  pred- 
atory captains  who  dashed  by  in  their 
special  cars,  the  lumbering  trains  of 
honest  investment  have  traversed  the 
same  rails,  and  the  honest  endeavor 
and  best  thought  and  best  energies  of 
American  life  have  reared  this  Ameri- 
can railway  giant  and  furnished  us  the 
best  and  cheapest  rail  transportation 
in  the  world.  There  must  be — there  is 
— a  righteous  mean  between  plunder- 
ing on  the  one  hand  and  popular  as- 
sault on  the  other,  and  the  problem 
of  the  day  is  to  find  that  righteous 
mean,  and  give  to  our  railroads  our 
boasted  square  deal. 

NEW  ERA  HAS  COME 

I  believe,  in  all  sincerity,  that  the 
day  of  plundering  financing  has 
passed.  I  should  like  to  proclaim,  in 
the  same  breath,  the  passing  of  rail- 
road baiting  on  the  part  of  press  and 
politicians,  who  have  been  less  inspired 
by  public  good  than  by  personal  profits 
and  political  gain.  It  has  been  a  great 
stunt  to  hammer  the  railroads. 

Fortunately  the  drift  is  toward  the 
sober,  second  thought,  and  there  is  a 
realization  that  these  vital  factors  in 
making  for  profitable  production  and 
general  good  fortune  are  entitled  to 
just  treatment.  There  is  the  convic- 
tion that  when  governmental  regula- 
tion leads  to  paralysis,  we  require  less 
of  it — that  is  to  say,  less  of  doctoring 
in  order  to  give  the  patient  a  chance 
it  can  not  be  disputed — there  has  been 
an  excess  of  commissioning,  and  our 


people  have  not  stopped  to  count  the 
pubHc  cost  of  the  practice,  nor  to 
measure  its  hampering  influence.  Do 
not  mistake  my  meaning.  I  beheve, 
most  heartily,  in  the  government  regu- 
lation of  public  utilities,  but  it  must 
be  righteous  and  understanding  regu- 
lation. The  best  railway  knowledge 
in  all  the  land  ought  to  light  the  way. 

MENACE  OF  GOVERNMENT 
OWNERSHIP 

Public  service  ought  to  be  the  im- 
pelling purpose,  unheeding  of  public 
clamor.  There  can  be  a  species  of  ex- 
cessive regulation  which  will  lead  to 
but  one  logical  result — and  that  is 
government  ownership.  It  is  the  log- 
ical outcome  of  the  present  drift,  it  is 
the  only  remedy  if  we  are  to  require  a 
service  at  rates  inadequate  to  meet 
fixed  charges  and  provide  means  for 
maintenance  and  needed  improve- 
ments. The  answer  to  this  statement 
is  readily  anticipated.  Ten  thousand 
tongues  are  ready  to  cry  out  about 
over-capitalization  in  stocks  and 
bonds.  It  is  true,  in  the  main,  but  the 
over-capitalization  comes  of  a  previous 
era.  It  comes  of  the  evolution  into 
systems,  and  the  crime  of  over-issue 
does  not  justify  the  wreck  of  the  sur- 
passing structure  of  American  rail- 
roading. 

Our  problem  is  not  of  yesterday,  it 
is  of  to-day  and  the  morrow.  It  is  up 
to  fair-minded  American  intelligence 
to  deal  with  the  rail  transportation 
problem  as  it  exists  to-day,  recogniz- 
ing that  increased  cost  in  transporta- 
tion is  quite  as  natural  as  increased 
cost  in  labor  and  taxes.  Transporta- 
tion can  not  be  eliminated  from  the 


cost  of  a  single  article  of  commerce,  in 
the  complexity  of  our  modern  life,  nor 
escape  the  upward  trend  of  cost. 

ENTITLED  TO  RATE  ADVANCE 

I  believe  it  is  the  opinion  of  ninety- 
nine  of  every  hundred  thinking  people 
that  the  railways  of  the  country  are 
entitled  to  an  increase  of  rates,  and 
would  gladly  see  it  granted.  The 
thinking  citizen  not  only  desires  that 
the  railroads  shall  be  able  to  exist  in 
dull  times,  and  earn  to  meet  their  obli- 
gations, but  they  are  entitled  to  a  rate 
which  will  permit  them  to  earn  a  profit 
in  fortunate  years,  which  may  be 
turned  to  betterment  when  the  lull 
comes. 

A  good  many  years  ago  a  son  of 
Israel  was  sold  into  Egypt  and  became 
famous  and  highly  trusted  for  his  in- 
terpretation of  Potiphar's  dreams. 
Some  of  you  have  heard  of  him,  but 
I  fear  you  were  more  interested  in  the 
provincial  scandal  which  recited  the 
infatuation  of  Potiphar's  wife  than  in 
his  more  noteworthy  accomplishments. 
However  that  may  be,  I  recall  that 
Joseph  read  the  master's  dream  and 
proclaimed  the  warning  to  lay  by  an 
abundant  store  during  the  seven  fat 
years,  which  were  then  beginning,  in 
order  to  be  prepared  for  the  seven  lean 
years  which  were  to  follow  them.  And 
Egypt  prospered  wonderfully  thereby, 
incidentally  recording  the  first  corner 
on  the  corn  market  ever  written  in 
sacred  or  profane  history. 

FAT  YEARS  AND  LEAN 

At  any  rate  the  wisdom  of  Joseph 
holds  good  to  this  day,  and  my  ap- 
plication   of   the    story   to   American 


railways  is  that  they  ought  to  'he  ^bl6 .  - 
to  earn  enough  in  the  fat  years  to  be 
prepared  to  carry  on  their  vast  im- 
provements in  the  lean  years  which  in- 
evitably come.  Under  our  present 
system  of  reduced  and  insufficient 
earnings,  along  with  increased  cost  of 
operation,  there  are  no  marked  rail- 
way betterments  except  in  the  high 
tide  of  earnings,  when  cost  is  highest 
and  improvements  are  hampered  by 
traffic  operations. 

TO  PROMOTE  STABILITY 

We  ought  to  reverse  this  order,  and 
provide  an  ample  earning  in  good 
times  to  enable  extensive  betterment 
to  be  made  in  the  dull  period,  all  of 
which  would  tend  to  better  service  in 
the  days  of  the  revival,  and,  mean- 
while, the  expenditure  for  betterments 
would  relieve  the  general  dullness 
amid  such  conditions  as  we  complain 
of  to-day. 

This  thought  grows  upon  me  when 
I  am  reminded  that  billions  are  said  to 
be  required  to  be  expended  to  bring 
our  railroads  up  to  the  facility  for  effi- 
cient service  which  managers  them- 
selves believe  to  be  the  due  of  our  peo- 
ple. I  have  heard  railway  men  say 
that  they  gladly  would  be  making  ex- 
penditures now,  but  they  cannot  bor- 
row and  do  not  earn  sufficiently. 
Through  agitation  and  restriction 
there  has  come  impaired  credit,  until 
there  is  a  threatened  collapse  of  the 
railroad  edifice,  and  it's  up  to  Ameri- 
can fairness  to  make  the  restoration 
and  provide  for  maintained  eminence. 
These  items  of  maintenance  and  bet- 
terments have  been  overlooked  by  the 
political  exhorters  who  have  baited  the 


icaikeaefsztii  tatth  unthinking  popular 
favor. 

COST  OF  PROGRESS 

The  advance  from  the  dinkey  wood- 
burner,  which  I  helped  to  wood-up  as 
a  boy  willingly  while  Dad's  wood-pile 
needed  attention,  to  the  great  locomo- 
tive of  to-day,  with  heavier  rails,  and 
the  thousand  conceits  of  modern 
genius,  which  add  to  safety  and  en- 
hance the  service,  has  involved  costs 
of  supersedure  beyond  all  comprehen- 
sion. When  we  come  to  a  physical  val- 
uation, if  we  must  commit  that  colos- 
sal and  costly  folly,  I  wonder  where 
the  genius  will  be  found  who  can  ap- 
ply apt  figures  to  cost  and  worth  of 
experience  and  evolution.  The  agi- 
tating politician  makes  no  new  invest- 
ment and  knows  no  cost  of  supersed- 
ure, but  continues  to  blow  with  the 
same  old  blather. 

AGAINST  GOVERNMENT 
OWNERSHIP 

This  railway  problem  is  so  big  and 
so  important  that  I  feel  the  inadequacy 
of  my  words  to  portray  it.  We  do  not 
w^ant  government  ownership,  though 
that  is  the  logical  drift.  I  am  opposed 
to  it  because  it  is  contrary  to  the  spirit 
of  our  institutions  and  violates  the 
very  conception  of  the  rights  and 
duties  of  government  and  citizenship 
which  has  given  us  an  individual  ac- 
complishment which  the  world  can 
nowhere  match.  It  would  stifle  our 
further  development  and  take  from  in- 
dividuals the  impelling  purpose  to  ac- 
complish and  achieve.  We  might  as 
well  adopt  paralyzing  socialism,  and 
fling  aside,  once  and  for  all,  the  sur- 


passing      American      accomplishriienf ' 
which  has  been  the  pride  of  our  own 
people    and    the    admiration    of    the 
world. 

Does  any  one  believe  that  govern- 
ment ownership  would  have  pushed 
the  railway  along  the  sands,  and  con- 
nected up  the  Florida  Keys  with 
arched  concrete  and  bonds  of  steel, 
which  clipped  twenty-four  hours  from 
;hc  commercial  time  between  Cuba 
and  the  United  States,  and  set  fairy- 
land abloom  for  three  hundred  miles 
en  route?  Does  any  one  believe  that 
federal  ownership  would  have 
threaded  the  plains  and  pierced  the 
Rockies  as  individual  enterprise  has 
opened  the  way  from  coast  to  coast, 
and  touched  the  desert  as  well  as  the 
valley  and  mine  with  man's  develop- 
ing hand  ? 

I  shall  be  fearful  of  government 
ownership  until  France  and  Germkiiy 
have  given  real  proof  of  government 
efficiency  and  economy  in  railway 
management,  and  our  own  govern- 
ment has  given  some  assurance  that  it 
may  carry  on  any  business  with  the 
economy  which  characterizes  every 
well-managed,  individual  enterprise. 
Nay,  more,  I  shall  doubt  all  wisdom 
of  government  control  until  we  have 
acceptable  proof  that  the  government 
can  fairly  regulate  through  its  com- 
missions, when  real  railroad  men  are 
making  the  tremendous  struggle  to 
conserve  their  properties  and  serve  the 
public  with  these  vastly  important 
agencies. 

REGULATION    EVOLVING 

Perhaps  the  lack  of  successful  regu- 
lation is  due  to  the  newness  of  the  un- 
dertaking, to  the  unavoidable  political 


agitatfon  and  to  the  harassment  of 
conflicting  authority  because  of  varied 
state  legislation  and  state  commis-  . 
sions.  Our  American  railroad  enter- 
prises are  so  vast  that  it  has  seemed 
to  me  that  none  is  longer  small  enough 
to  be  encompassed  by  intrastate  lines, 
and  we  ought  to  put  the  entire  service 
under  interstate  control.  Such  a 
policy  would  save  miUions  in  public 
expense  and  put  us  on  a  broad  plane 
which  is  befitting  the  gigantic  charac- 
ter of  American  railway  operation. 
We  should  then  escape  the  excess  of 
state  legislation.  I  speak  deliberately 
— the  law-making  industry  is  too  often 
worked  overtime.  It  is  the  only  in- 
dustry in  the  country  that  is  going  lOO 
per  cent.  This  country  needs  to-day 
less  legislative  bills  pending  and  more 
railroad  bills  of  lading. 

Having  started  with  the  explanation 
that  I  have  ho  railway  connection,  and 
having  had  no  experience  in  recent 
legislative  endeavor,  I  am  not  sup- 
posed to  point  the  way  to  specific  cor- 
rection. I  have  been  reporting  the 
impressions  of  a  layman,  who  has  no 
ax  to  grind,  no  stock  to  enhance,  and 
yet  belongs  to  the  ranks  of  those  who 
pay  the  freight. 

FOR  ADVANCE  IN  RATES 

It  is  apparent  that  the  Interstate 
Commerce  Commission  believes  in  the 
pressing  necessity  for  increased  earn- 
ings for  our  railroads.  The  sug- 
gestions of  increased  passenger  rates, 
baggage  charges  and  other  collections 
for  service  not  charged  for  heretofore, 
indicate  the  controlling  body  favors 
increased  earnings  but  opposes  the 
short  and  direct  route.  The  rate  in- 
crease would  be  direct  and  immediate. 


10 


and  these  other  remedial  efforts  could 
be  left  to  follow  by  this  slower  process 
of  evolved  adoption.  If  the  combined 
income  from  increased  rates  and 
added  service  charges  made  excessive 
earnings  contrary  to  public  policy,  the 
same  authority  which  grants  the  in- 
crease could  order  a  reduction. 

The  simple  public  mind,  unbiased 
in  the  matter,  thinking  only  of  fair- 
ness and  the  common  good,  favors  the 
increase  and  does  not  expect  a  later 
reduction.  We  have  seen  the  advance 
of  wages.  We  know  of  mounting 
taxes.  We  can  understand  all  about 
more  costly  equipment.  Having  come 
to  pay  more  for  our  food,  we  only 
wonder  that  we  have  not  been  charged 
more  for  its  transportation.  Knowing 
the  increased  cost  of  operation  in 
every  other  industrial  and  commercial 
enterprise,  we  have  wondered  how 
any  one  could  escape  added  cost  in  the 
chief  agency  of  exchange  and  distribu- 
tion. 

SHOULD  ADVANCE  FREIGHTS 

Our  American  wage  scale  is  twice 
to  thrice  that  of  Europe.  Our  rates 
of  interest  are  generally  higher.  Our 
distances  are  greater  and  our  popula- 
tion less  dense.  Under  all  these  condi- 
tions it  would  be  very  natural  for  our 
railway  transportation  to  be  higher. 
(Jur  freight  rates  are  notably  less,  and 
our  passenger  service  only  a  trifle 
liigher.  and  it  is  vastly  superior. 
When  classification  is  taken  into  ac- 
count. I  believe  ours  is  the  cheaper. 
.And  yet  on  this  very  branch  of  busi- 
ness which  costs  the  more  in  this  coun- 
try, the  railway  commission  recom- 
mends the  increase  which  it  is  power- 


less to  grant.  If  argument  were 
needed  for  the  general  advance,  the 
commission  has  presented  it. 

I  hope  it  will  speedily  come.  It  will 
not  bring  the  complete  revival  of 
American  activity,  but  it  will  not  only 
save  the  crash  of  the  temple  of  trans- 
portation, but  will  reestablish  railway 
credit,  and  lead  to  that  physical  re- 
habilitation which  is  of  prime  im- 
portance in  ministering  to  greater 
American  activities.  More,  and  very 
significant  too,  the  governmental  as- 
sistance in  the  hour  of  need  will  be 
new  assurance  that  it  is  neither  the 
function  nor  the  purpose  of  govern- 
ment to  destroy,  but  to  foster  and  pro- 
tect, and  American  business  success, 
lawfully  achieved,  is  to  be  encouraged 
and  heralded  as  important  to  Ameri- 
can progress. 

PEOPLE  OWN  THE  RAILROADS 

Perhaps  a  considerable  part  of  polit- 
ical play  in  hostility  to  our  railroads 
is  due  to  the  mistaken  impression  that 
they  are  the  property  of  a  few  of  the 
enormously  rich.  If  this  were  true  it 
would  not  alter  the  demand  for  just 
treatment,  for  the  civilization  which 
ignores  property  rights  will  quickly 
trespass  human  rights.  As  a  matter 
of  fact,  however,  our  railroads  are 
largely  the  property  of  those  we  term 
the  people,  and  their  securities  are  in 
the  assets  of  savings  banks,  Hfe  insur- 
ance companies,  hospital  and  college 
funds,  and  the  foundation  of  thou- 
sands of  sacred  trusts.  The  directing 
heads  of  these  lines  and  systems  are 
not  the  scions  of  wealth,  nor  the 
creatures  of  privilege  ;  they  are  the  fin- 
est examples  of  the  reward  of  merit 


11 


which  we  have  developed  in  the 
boasted  opportunities  of  American 
life.  When  the  moneyless  American 
youth  may  climb  from  the  humblest 
rank  of  railroading  to  the  direction  of 
the  energies  of  hundreds  of  millions 
of  capital  and  many  thousands  of  men, 
through  sheer  force  of  ability  and  con- 
scientious service,  fine  examples  of 
which  are  gracing  this  presence  to- 
night, the  system  can  not  be  far  wrong. 
It  is  our  inspiration  to  developing 
youth  and  assurance  doubly  sure  that 
ours  is  the  civilization  of  opportunity. 
In  every  city  throughout  the  land  is 
some  allied  industry,  and  at  the  head 
of  these  are  the  worthy  captains  of 
American  endeavor,  who  have  grown 
up  from  village  or  farm,  and  toiling 
with  them,  when  the  tide  runs  full,  is 
a  thrifty,  well-compensated,  prosper- 
ing people,  rejoicing  in  American  tri- 
umphs and  eager  to  go  on. 

HONESTY  AND  INTIMACY 

There  are  two  things  to  commend 
to  the  public,  to  railway  managers  and 
to  members  of  the  Railway  Business 


Association.  One  is  simple  honesty, 
the  other  is  greater  intimacy — the  full- 
ness of  understanding  between  the 
railway  management  and  the  public 
served.  There  has  been  too  much 
aloofness,  sometimes  a  contempt  for 
public  regard.  The  minds  which  lead 
in  making  dependable  public  opinion 
mean  to  be  fair,  and  need  only  to  be 
informed.  Railways  have  suffered 
needlessly  because  of  the  lack  of  pub- 
lic understanding.  The  public  has  an 
ear  for  the  manager  as  well  as  the 
railway  baiters,  and  the  growth  of  fa- 
vorable public  opinion  to-day  is  trace- 
able to  the  fact  that  railways  have 
given  their  cause  to  public  considera- 
tion. The  importance  of  railway 
service  to  the  people,  the  public  charac- 
ter of  the  business,  and  public  regula- 
tion— all  demand  intimacy  of  under- 
standing and  mutual  confidence.  Add 
to  this  the  unalterable  honesty  that  is 
essential  to  right  management  and  the 
abiding  honesty  that  makes  for  sincer- 
ity in  politics,  and  we  shall  hail  a  new 
era,  which  shall  mark  a  greater  and 
swifter  stride  to  our  American  aston- 
ishment of  all  the  world. 


12 


REQUESTS     FOR      COPIES 

of  this  pamphlet  will  be  welcome  from  all 
those  desiring  to  place  it  in  the  hands  of 
their  representatives  or  friends.  Copies  fur- 
nished or  sent  direct  to  lists  upon  application 
to  Frank  W.  Noxon,  Sec'y,  Railway  Business 
Association,  30  Church  Street,  New  York. 


Form  B164 


^^.-^■|Wi!ip£^r:  .  I 


^rv^  TO  DBSK  BK^  J  w^f i  BORHOW.O 

lOAN  DEPT. 


^!!!:i^<«a„s„bi;"c;7o;-^Xe 


(Cl795sl0)476B 


"°'""&'eg"'°-- 


MAR  3  1  1922 

UK,VLfo„Y,CFUurJRM 


PAT.  JAN.  21,  1908 


H  6:' 


486433 


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